European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>At the end of PUSU deadline, EQT and Dechra have agreed a 3,875p/share offer (44% premium, 21.4x EV/Fwd EBITDA, 30.2x Fwd P/E, vs. market leader Zoetis at 20.5x and 28.9x respectively).</li>
<li>Other private equity companies may not be able to match the deal's disintermediation benefits. Considering the short-term issues, I believe investors will accept the offer.</li>
<li>My base-case DCF fair-value estimate is 3,568p/share, 7.9% below the offer price. Therefore I set my <strong>TP</strong> at <strong>3,875p.</strong> Spread is 5.8%/8.8% (gross/annualised), I feel the risk/reward is balanced. Long.</li>
</ul>


At the end of PUSU deadline, EQT and Dechra have agreed a 3,875p/share offer (44% premium, 21.4x EV/Fwd EBITDA, 30.2x Fwd P/E, vs. market leader Zoetis at 20.5x and 28.9x respectively).
Other private equity companies may not be able to match the deal's disintermediation benefits. Considering the short-term issues, I believe investors will accept the offer.
My base-case DCF fair-value estimate is 3,568p/share, 7.9% below the offer price. Therefore I set my TP at 3,875p. Spread is 5.8%/8.8% (gross/annualised), I feel the risk/reward is balanced. Long.


EQT/​Dechra Pharmaceuticals: Recommended Offer

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dechra-pharmaceuticals-plc" target="_blank" data-smartkarma-citation="entities:21908:1" rel="noopener">Dechra Pharmaceuticals (DPH LN)</a> received an offer from the Swedish private equity firm EQT regarding a possible all-cash deal, where Dechra shareholders would receive £40.70 per ordinary share in cash.</li>
<li>Right after the announcement, Dechra shares surged 33%. The shares are currently trading at £37.66, implying 10% upside potential.</li>
<li>Without EQT offer, based on current financial performance, Dechra has a bleak outlook. Currently, Dechra has average target price of £39.39, implying a spread of just ~5%.</li>
</ul>



Dechra Pharmaceuticals (DPH LN) received an offer from the Swedish private equity firm EQT regarding a possible all-cash deal, where Dechra shareholders would receive £40.70 per ordinary share in cash.
Right after the announcement, Dechra shares surged 33%. The shares are currently trading at £37.66, implying 10% upside potential.
Without EQT offer, based on current financial performance, Dechra has a bleak outlook. Currently, Dechra has average target price of £39.39, implying a spread of just ~5%.


Dechra Pharmaceuticals (DPH LN): Best Case Scenario Offers 10% Upside Potential

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bionote-inc" target="_blank" data-smartkarma-citation="entities:36446:1" rel="noopener">Bionote (377740 KS)</a> was listed on 22nd Dec 2023, when it raised US$73m in its downsized Korean IPO. Its three-month lockup will expire on 21st Mar 23.</li>
<li>Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.</li>
<li>Coming up for three-month lockup expiry are the firm’s three pre-IPO investors, together with Gunwoo Ha (ex-CEO). The three pre-IPO investors had earlier trimmed their respective stakes in the IPO.</li>
</ul>



Bionote (377740 KS) was listed on 22nd Dec 2023, when it raised US$73m in its downsized Korean IPO. Its three-month lockup will expire on 21st Mar 23.
Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.
Coming up for three-month lockup expiry are the firm’s three pre-IPO investors, together with Gunwoo Ha (ex-CEO). The three pre-IPO investors had earlier trimmed their respective stakes in the IPO.


Bionote Lock-Up - Uncertainty on the Horizon, Likely to See Some Selling Pressure

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Zoetis delivered a decent set of results for the last quarter of 2022 meeting analyst expectations as well as the high end of its management guidance.</li><li>Despite the economic challenges, ongoing pandemic recovery, and the political unpredictability brought on by the war in Ukraine, they delivered operational growth for the year in each of their top 13 markets.</li><li>The company's unique companion animal portfolio drove its 8% operational revenue increase for the year, growing 14% operationally.</li></ul>

Zoetis delivered a decent set of results for the last quarter of 2022 meeting analyst expectations as well as the high end of its management guidance.Despite the economic challenges, ongoing pandemic recovery, and the political unpredictability brought on by the war in Ukraine, they delivered operational growth for the year in each of their top 13 markets.The company's unique companion animal portfolio drove its 8% operational revenue increase for the year, growing 14% operationally.

Zoetis Inc.: Launch Of CircoMatch & Other Drivers

Syngene International Ltd / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/syngene-international-ltd" target="_blank" data-smartkarma-citation="entities:26923:1" rel="noopener">Syngene International Ltd (SYNG IN)</a> provides integrated services from early discovery to commercial supply across all major therapeutic areas and modalities. The company has 400+ active clients.</li>
<li>To capitalize on the secular industry tailwind, the company has been investing to enhance capacity and capability, which has led to extension of existing client relations and engaging new clients.</li>
<li>For FY23, the company expects high-teens revenue growth and EBITDA margin of ~30%. Operating leverage is expected to improve from next year onwards, and that should improve the overall profitability.</li>
</ul>



Syngene International Ltd (SYNG IN) provides integrated services from early discovery to commercial supply across all major therapeutic areas and modalities. The company has 400+ active clients.
To capitalize on the secular industry tailwind, the company has been investing to enhance capacity and capability, which has led to extension of existing client relations and engaging new clients.
For FY23, the company expects high-teens revenue growth and EBITDA margin of ~30%. Operating leverage is expected to improve from next year onwards, and that should improve the overall profitability.


Syngene International Ltd (SYNG IN): Well-Positioned to Capitalize On Strong Industry Tailwind

United States

Zoetis Inc. discovers, develops, manufactures, and commercializes animal health medicines and vaccines, with a focus on both livestock and companion animals. The Company markets its products in North America, Europe, Africa, Asia, Australia, and Latin America.

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Zoetis (ZTS UN)

EQT/Dechra Pharmaceuticals: Recommended Offer

In spite of negative trading updated, EQT has followed in its pursuit of Dechra and today both have agreed a fair, in my view, 3,875p/share offer...

Jesus Rodriguez Aguilar

Dechra Pharmaceuticals (DPH LN): Best Case Scenario Offers 10% Upside Potential

Dechra received takeover offer from private equity firm EQT for £40.70 per share all-cash deal. Current price implies ~10% spread. EQT has until 11...

Tina Banerjee

Bionote Lock-Up - Uncertainty on the Horizon, Likely to See Some Selling Pressure

Bionote (377740 KS) was listed on 22nd Dec 2023, when it raised US$73m in its downsized Korean IPO. Its three-month lockup will expire on 21st Mar 23.

Clarence Chu

Zoetis Inc.: Launch Of CircoMatch & Other Drivers

Zoetis delivered a decent set of results for the last quarter of 2022 meeting analyst expectations as well as the high end of its management...

Baptista Research

Syngene International Ltd (SYNG IN): Well-Positioned to Capitalize On Strong Industry Tailwind

Through capacity and capability addition in biologics manufacturing and expansion of commercial API manufacturing, Syngene has expanded...

Tina Banerjee

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52-week Range

Market Cap (USDm)

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EQT/​Dechra Pharmaceuticals: Recommended Offer

In spite of negative trading updated, EQT has followed in its pursuit of Dechra and today both have agreed a fair, in my view, 3,875p/share offer...

Jesus Rodriguez Aguilar

Dechra Pharmaceuticals (DPH LN): Best Case Scenario Offers 10% Upside Potential

Dechra received takeover offer from private equity firm EQT for £40.70 per share all-cash deal. Current price implies ~10% spread. EQT has until 11...

Tina Banerjee

Bionote Lock-Up - Uncertainty on the Horizon, Likely to See Some Selling Pressure

Bionote (377740 KS) was listed on 22nd Dec 2023, when it raised US$73m in its downsized Korean IPO. Its three-month lockup will expire on 21st Mar 23.

Clarence Chu

Zoetis Inc.: Launch Of CircoMatch & Other Drivers

Zoetis delivered a decent set of results for the last quarter of 2022 meeting analyst expectations as well as the high end of its management...

Baptista Research

Syngene International Ltd (SYNG IN): Well-Positioned to Capitalize On Strong Industry Tailwind

Through capacity and capability addition in biologics manufacturing and expansion of commercial API manufacturing, Syngene has expanded...

Tina Banerjee

EQT/Dechra Pharmaceuticals: Recommended Offer